Expensive stocks often command premium valuations because the market thinks their business models are exceptional. However, the downside is that high expectations are already baked into their prices, leaving little room for error if they stumble even slightly.
Separating true intrinsic value from speculation isn’t easy, especially during bull markets. That’s where StockStory comes in - to help you find high-quality companies that will stand the test of time. That said, here are two high-flying stocks expanding their competitive advantages and one with big downside risk.
One high-flying stock to sell:
Inspire Medical Systems (INSP)
Forward P/E ratio: 52.2x
Offering an alternative for the millions who struggle with traditional CPAP machines, Inspire Medical Systems (NYSE: INSP) develops and sells an implantable neurostimulation device that treats obstructive sleep apnea by stimulating nerves to keep airways open during sleep.
Why Does INSP Give Us Pause?
- Subscale operations are evident in its revenue base of $898.7 million, meaning it has fewer distribution channels than its larger rivals
- Forecasted revenue decline of 3.4% for the upcoming 12 months implies demand will fall off a cliff
At $69.10 per share, Inspire Medical Systems trades at 52.2x forward P/E. Check out our free in-depth research report to learn more about why INSP doesn’t pass our bar.
Two high-flying stocks to watch:
Monolithic Power Systems (MPWR)
Forward P/E ratio: 35.9x
Founded in 1997 by its longtime CEO Michael Hsing, Monolithic Power Systems (NASDAQ: MPWR) is an analog and mixed signal chipmaker that specializes in power management chips meant to minimize total energy consumption.
Why Will MPWR Outperform?
- Annual revenue growth of 27.6% over the past five years was outstanding, reflecting market share gains this cycle
- Performance over the past five years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 29.9% outpaced its revenue gains
- Market-beating returns on capital illustrate that management has a knack for investing in profitable ventures
Monolithic Power Systems’s stock price of $1,191 implies a valuation ratio of 35.9x forward P/E. Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
Medpace (MEDP)
Forward P/E ratio: 35.7x
Founded in 1992 as a scientifically-driven alternative to traditional contract research organizations, Medpace (NASDAQ: MEDP) provides outsourced clinical trial management and research services to help pharmaceutical, biotechnology, and medical device companies develop new treatments.
Why Is MEDP on Our Radar?
- Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 18.7% over the past two years
- Share repurchases have amplified shareholder returns as its annual earnings per share growth of 30% exceeded its revenue gains over the last five years
- MEDP is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its improved cash conversion implies it’s becoming a less capital-intensive business
Medpace is trading at $663.33 per share, or 35.7x forward P/E. Is now the right time to buy? Find out in our full research report, it’s free.
Stocks we like even more
ALSO WORTH WATCHING: Top 5 Momentum Stocks. The best time to own a great stock is when the market is finally noticing it. These aren’t just high-quality businesses. Something is happening with them right now. Elite fundamentals meet near-term momentum — both boxes checked at the same time.
Find out which stocks our AI platform is flagging this week. See this week’s Strong Momentum stocks — FREE. Get Our Strong Momentum Stocks for Free HERE.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,460% between June 2020 and June 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,552% between June 2020 and June 2025). Find your next big winner with StockStory today.
